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Carlsons' bitter family battle becomes public in court

(AP) - Curtis Nelson, the grandson of the man who
founded Carlson Companies, has sued the family business and his
mother, claiming he was denied his rightful position at the
company's helm because of a "hostile" relationship with his
mother and the company board.

In the lawsuit filed Tuesday, Nelson demands his share of the
company, which, according to Forbes magazine, had total revenues of
nearly $5 billion in 2005.

The lawsuit pits the third-generation heir who wanted to be the
next chief executive against Marilyn Carlson Nelson, who decided
her son wasn't up to the job.

"Curtis had expectations and so did his mother, and apparently
they weren't clear on it," said Tom Hubler, a family business
consultant. "They need to sit down and forgive each other and get
this settled out of court."

Carlson Companies, one of the largest family-held corporations
in the country, was built by Minnesota business icon Curt Carlson --
who started the business in 1938 with a $55 loan.

“Curtis had expectations and so did his mother, and apparently they weren't clear on it. They need to sit down and forgive each other and get
this settled out of court.”

Tom Huber, family business consultant

It was originally
Gold Bond Stamps, a consumer loyalty program, then grew to a
hospitality, travel and marketing enterprise with about 170,000
employees in more than 140 countries.

Carlson Nelson, the current CEO, intended to retire at age 65
but held on, hoping her son would rise to the job, according to
legal documents. Carlson Nelson is now 67. It's unclear what the
board of directors will do about selecting her successor.

Concerns about Curtis Nelson peaked about a year ago when the
company's board removed him as president of operations. He then
declined an offer to be vice chairman, storming out of the board
room on at least one occasion.

Carlson Companies formally fired Curtis Nelson at the end of
January after banning him from the corporate campus.

In an interview from the British Virgin Islands, Nelson told the
Star Tribune that his ouster was based on "family politics."

Lawyers for the company and Carlson Nelson say neither Nelson
nor any family member has a legal claim on company assets and that
Curt Carlson worked to prevent a division of the company before his
death in 1999.

"This is a painful time for Marilyn and (husband) Glen and the
family, but you have to do what's best for the company, its
employees and its customers," said Mike Ciresi, the attorney
representing the company and its board of directors.

The Carlsons are a prominent business family in Minnesota.
Marilyn Carlson Nelson is known for her civic interests and for
regularly making the list of the most powerful women in corporate
America. Her net worth in 2005 was estimated at $1.4 billion by
Forbes.

Curtis Nelson began working in the family business at age 12, as
a dishwasher, busboy, cook and weekend head cook at the Country
Kitchen in Wayzata. He graduated from Cornell University in 1986
and entered a hotel management training program.

In 1989, at his grandfather's urging, Nelson joined the
business.

"Curt assured Curtis that his ultimate goal was for Curtis to
become CEO of the company," the lawsuit said. From the time Nelson
joined the company, "Curt and Marilyn made various public
statements that Curtis was being groomed to become CEO."

But in a countersuit, the company and its board said Nelson
engaged in "self-defeating" conduct extending beyond "erratic
business judgment."

During a leave of absence in May 2003, Nelson agreed that if he
remained "clean and sober" and met other conditions, he would be
reinstated as COO, the company response said.

Despite the agreement to stay sober, "Curtis used his company
computer and company e-mail system -- in 2006, while he was
president and COO -- to make purchases of large quantities of
controlled substances from multiple on-line pharmacies," the
company response said. "He also ordered a product called
'Quick-Detox,' which is advertised as helping users to 'pass any
drug test!!!'"

In the interview, Nelson said he was an addict and alcoholic and
struggled with painkiller addiction after his liver transplant in
2000.

In 2003, independent board members Lawrence Perlman, Duane
Kullberg and Harald Einsmann told Nelson in a memo that there was
no assurance he would become CEO.

Referring to an undisclosed occurrence, the board members wrote,
"Before this recent event, there was no assurance that you would
get the CEO job and now the mountain you need to climb is higher."

The company also alleges Nelson owes it $600,000 for management
services for a private hotel venture. The company also says Nelson
made poor business decisions.

Still, Nelson claims his mother stripped him of responsibilities
without identifying "any objective measures of performance where
Curtis had been rated less than outstanding."

The company response said Carlson Nelson was her son's biggest
supporter and the board criticized her for having a "blind spot"
for him.

The responses also say Nelson received more than $5.5 million
from Carlson Companies for his 2006 bonus, termination payments,
residual and deferred compensation. He also gets health care
coverage until age 65.

"In addition, from 2004 to 2006, he received more than $5.4
million in cash and asset distributions from the trusts. (Yet he
complains of 'pitifully small dividends.') He will get ongoing
trust distributions. He is not entitled - or deserving - of
anything more," the company response said.